Effective today, recreational cannabis is legal across Canada. But rather surprisingly, the marijuana index does not reflect this historic occasion. Yesterday, the majority of stocks closed in the red, but MedMen stock was an exception with double-digit gains.
Continuing on from an exceptional last week, MedMen Enterprises (CSE:MMEN) remains in the green today.
MedMen Stock
MedMen Enterprises stock grew a whopping 10.86% yesterday, continuing on from massive gains of 28% last Friday. The reason for all the excitement was the announcement of the company's acquisition of PharmaCann, which some are dubbing as "a steal."
The company paid $682 million USD to acquire the privately owned PharmaCann, and the price tag is considered to be a very fair price for what it means for MedMen.
Pros of the Acquistion
PharmaCann LLC is a US-based medical marijuana dispensary. Because of this acquisition, MedMen will now have licensed locations in 12 states in the US.
Expanding its footprint like this will make MedMen one of the "largest U.S. cannabis companies in the world's largest cannabis market," according to Adam Bierman, MedMen's chief executive officer and co-founder.
He furthered:
"The transaction adds tremendous scale to our vertically integrated business model by expanding our U.S. retail footprint across important growth markets while strengthening our cultivation and production capabilities."
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PharmaCann and MedMen Stock Holders
PharmaCann shareholders will now own around a 25% stake in the combined company.
And both companies and affiliated shareholders will gain from this transaction as it will double market reach. MedMen can now serve an estimated 50% of the total $75 billion US cannabis market by 2030.
MedMen stock should be in line to soar further over the coming years.
About MedMen
MedMen is a Los Angeles-based company that trades on the Canadian index. As a vertically integrated company, it owns and operates cannabis facilities across cultivation, processing, and retailing.
PharmaCann dispenses medicinal cannabis products for adult and pediatric patients in eight states in the US.
MedMen stock is well positioned to be a major force in this market. The company has tapped into the Canadian market with a joint venture with Cronos Group (NASDAQ:CRON) and already has a reputable name for itself in America.
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